When it comes to shopping for high-ticket consumer goods, most of us think we are canny buyers. We will not fall for the first offer that comes our way, preferring to shop around for the best-value washing machine, dishwasher etc. And when the deal is finally done, we take satisfaction from getting a good deal.
Mortgages, however, present a different scenario. Despite being the biggest ticket purchase we will ever make, they tend to be chosen more quickly and with less thought than the average piece of furniture.
The problem is that mortgages present very little buyer appeal - you cannot wear them, drive them or wash your dirty clothes in them. Even though they might facilitate the purchase of a home, their impalpable nature reduces their consumer appeal. Shopping around for financial products is tedious.
The thing to remember here, however, is that the difference between a good and a bad mortgage can spill over into other aspects of our lives. The money savings or financial flexibility that the right choice brings could, for example, be used to facilitate other consumer purchases.
Save €1,000 on your mortgage this year by getting a better rate and you'll be able to afford that wide-screen television. Or choose a current-account loan and your high cash balances could help you to rid yourself of your mortgage earlier than you ever imagined.
As befits its position as financial regulator, the Irish Financial Services Regulatory Authority (IFSRA) has a bit of a bee in its bonnet about this type of thing. The authority has produced a catalogue of literature on the importance of shopping around for consumer products, with selecting a mortgage among the subjects covered.
The advice offered by IFSRA is sufficiently basic to be accessible to all and sufficiently-informed to offer a useful tool to any mortgage hunter. The regulator outlines, for example, the different channels through which mortgages can be bought and outlines ways in which the different products can be best compared.
Importantly, the advice is based on consumers approaching different brokers and lenders to see what they can offer rather than feeling obliged to contact their own bank simply because they have a relationship there.
Top of the list on the unbiased advice front is the importance of comparing like with like or, in other words, making sure that all mortgage quotes can be compared directly. This means collecting quotes for the same loan amount, the same term and the same type of rate. And if this seems too confusing, IFSRA helpfully provides a list of basic questions that should be asked of all those offering a loan.
IFSRA says consumers should make an effort to write all this information down in one place so that they can be sure of making the right decision in the end.
While simplistic, this advice is eminently practical, since the armfuls of glossy mortgage brochures produced by providers can be more confusing than clear. And dull as the process might be, you know it makes sense.
IFSRA's advice-based publications can be found on www.ifsra.ie
